Can the government really stop the compensation culture?

David Cameron has declared war on the compensation culture and has asked former cabinet minister Lord Young to review health and safety laws.

And, as Daily Mail writers and blustering bloggers know, the chief cause of the compensation culture is NuLabour ‘Elf ‘n’ Safety legislation.

But here’s a wee brain teaser for you. Without looking, can you guess how many Health and Safety Acts have been passed since 1997?  Wrong, try again!

The answer is one. Yes, that’s right, just one. The Health and Safety (Offences) Act 2008. All it does is increase the penalties for offences that already existed. True, there have been some statutory instruments too but these apply mostly to technical issues in specific industries.

In fact, Health and Safety legislation has almost nothing to do with the increased paranoia about health and safety from companies and public bodies. This presents a problem for the government. It would be very convenient if legislation was behind the so-called health and safety culture. Legislation can easily be repealed. What we are dealing with here, though, is something much deeper. Over the past couple of decades the common law has evolved in parallel with social attitudes to create a litigious culture.

Most compensation claims are based not on health and safety legislation but on the duty of care and the tort of negligence which were established in English common law by a case in 1932. In theory, then, people could have sued councils for tripping over broken paving stones and demanded compensation from schools for injuries to their children back in the 1930s. They didn’t, of course, for a whole raft of reasons. Lack of knowledge of the law, social deference, prohibitively expensive legal advice and, for the most part, an unsympathetic judiciary ensured that few compensation claims were brought.

No-win no-fee lawyers did much to fuel the compensation culture as they came up with ingenious ways to interpret the duty of care and exploit it in the courts. But it would be wrong just to blame the lawyers. Social attitudes have changed too. In the 1970s it would never have occurred to most people to sue schools, local authorities or even hospitals. Over the last few decades, people have become less deferential towards the state and other public bodies while, at the same time, demanding more of them. Judges attitudes have also shifted, in line with public opinion. They are more likely to give a favourable hearing to people bringing cases against public bodies than they were twenty years ago.  

That said, while these cases may get a lot of publicity, they rarely result in large payouts. The publicity, though, is enough to crank up the hysteria to a point where health and safety law is deemed to be so restrictive that it can be used as an excuse for almost anything. It’s far easier to blame health and safety laws than to admit that you are just trying to cut costs or that you are too damned lazy to do something.

Here’s an example. My mum’s window cleaner told her that ‘Elf ‘n’ Safety laws meant that he was no longer allowed to climb a ladder. Instead, he would have to clean her windows with a machine on a long pole. This would, of course, cost more as the machine was expensive, even though it didn’t do as good a job. The window cleaner was therefore able to charge more for doing less work and use a machine which enabled him to clean windows much faster, which increased his profits. His customers, getting a worse service, were fobbed off with a story about health and safety laws. Fortunately, my mum found another window cleaner who told her the whole thing was complete rubbish.

This is not an isolated case. Unscrupulous businesses and lazy bureaucrats often use health and safety legislation as an excuse to avoid their obligations and cut costs. 

But the use of mythical health and safety legislation as a scapegoat only contributes to the general noise. Insurance companies have got in on the act too, talking up theoretical and, in may cases, highly unlikely litigation liabilities, to scare clients into taking out insurance. Consequently, many companies public bodies have found themselves facing twin assaults from vexatious litigants and insurance companies jacking up premiums. It is hardly surprising that many seek to mitigate their liabilities with excessively risk averse policies. Large organisations then put pressure on the smaller organisations that supply them, demanding risk assessments and astronomical insurance cover just to be allowed to bid for contracts.

David Cameron’s Big Society might even make things worse. Imagine you are the head-teacher in a school that has opted out of local authority control or the trustee of a charity set up to run the local parks. Suddenly you get a letter from your insurance company informing you of your potential liabilities should someone fall over on your premises. No longer able to go to the council legal department for advice, you could be forgiven for playing safe and curtailing the activities of some of your users. Running things locally might seem attractive until you realise that you would have to sort out any legal mess arising from compensation claims. That might put some of the army of volunteers off.

The compensation culture is not the result of legislation, it is the result of an increase in litigation and a massively disproportionate increase in the fear of litigation, built up over the last two decades. It is therefore difficult to see what the government might do to curb it. Is David Cameron suggesting legislation to free public bodies from some of their liabilities? Is he going to tell motorists that they can no longer sue their council for pot-hole damage? Is he going to tell people they can’t sue hospitals? Is he going to tell parents they can no longer sue schools? Good luck with that one Dave.

I’d be interested to hear what the blogging lawyers have to say about this. Is it possible to legislate to curb the compensation culture? Is there anything the government can realistically do to stop it? Darren?  Carl? Charon QC? PJH? Anyone??

Answers in the usual place please.

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8 Responses to Can the government really stop the compensation culture?

  1. Pingback: Can the government really stop the compensation culture? - Rick - HR Space

  2. TomJ says:

    Without diving into the law library, surely the Health and Safety at Work Act spawned a plethora of Statuatory Instruments; the Six Pack is the term which springs to mind from my somewhat out-of-date training. This is not to say that the thrust of the argument, that many, if not most, appeals to Eflin Safety are spurious, is not valid; it is rather to point out that just looking at the amount of primary legislation is not to tell the entire story…

  3. Great post absolutely spot on. Health and safety law ( othe than specific rules based on hazardous substances etc) is really just about the duty to take reasonable care and carry out risk assessments. You can’t legislate to reduce the burden because the law is perfectly reasonable and based on EU rules which we can’t change anyway.

    Most of the hysteria is just whipped up by the press. Close the Daily Mail and many o these problems will vanish. We could bear in mind though that the insurance industry ha a hand in this. When people quote health and safety they are often just relying on what thee insurance co has told them they need to do to stay covered. Maybe we coul legislate to make insurance companies less evil?

  4. eatlupins says:

    Rick,

    I must say I think you are totally “on the money” by suggesting that the problem here is not primary legislation.

    I remember well my own recollection of an example that all was not well. It was back in 1999 when working in Coventry. I was told of an incident the previous evening, a member of my staff had driven to work and parked in the company car park. On finishing work she found her car wouldn’t start and so she called the AA. 30 minutes later the AA arrived at the gate of the car park only to be told by the security guard that he could let the patrolman on to site because he didn’t have a method statement for the work which was to be carried out the site. The solution was to push the car on to the public highway so that he could repair the car and send her on her way home.

    This madness is an example of interpretation, not law. I watched Lord Young on breakfast TV with a mixture of hope and cynicism. He observed that anybody can set themselves up as a Health & Safety consultant without qualifications, the implication being that “qualified” consultants will take a more balanced view and be less likely to give over the top, inappropriate advice to their clients. I can’t see that a wholesale training of consultants will deliver the solution. I can’t recall any course I have attended which had a section headed “Common Sense & Proportionally”. I wish Lord Young every success in turning the situation around but I fear the genie may not easily return to the bottle.

    Lupin

  5. I blame the courts. Read number 5 in this list of claims. Who would volunteer to lead any organised childrens outing?

    http://www.publications.parliament.uk/pa/cm200506/cmselect/cmconst/754/754we26.htm

    “The party decided to eat their picnic lunch before undertaking the guided tour and walked a short distance up a footpath to some open land. One of the Scouts noticed a small cave opening across a stream and asked the Scout Leader for permission to explore it. The Leader refused permission, pointing out that caves could be dangerous. The Scout then moved away to where his father stood and repeated the request. His father, who had heard the leader’s ruling, gave permission, provided his son with a cigarette lighter for illumination and accompanied him into the cave. A short distance inside, the Scout slipped and fell down a “chimney” leading into the main chamber of Gaping Ghyll. He fell 300 feet to his death.

    The Father sued the Scout Association. His action was defended but the Judge found in favour of the claimant, stating that, as he was born in a city, he could not have been expected to recognise the dangers. He held that the Scout Leader should have prevented the father from entering the cave with his son and in failing to do so he breached his duty of care.

    The Craddocks’ older son continued as a member of the same Group for two years after the accident leaving when he reached 18 with his Chief Scout Award. The litigation did not commence until after he left.”

  6. Pingback: Daily links | Redmans

  7. vince lammas says:

    Great post Rick and you have picked up the gist of my tweets this morning. This is not about the law itself but the behaviour of “legal advisers”, insurers and busybodies.

    Lord Young has talked about issuing “clarification and guidance” rather than passing legislation. How he plans to dissuade law firms from taking speculative action is not yet clear and scouts case quoted by fatmanonatransam suggests judges don’t think the public can be trusted to apply common sense.

    Underlying concern appears to be “no win no fee” cases are raised by lawyers with a view to scare organisations into paying compensation rather than going to court – where the prospect of winning a case might be slight.

    But the problem runs deeper – the “compensation culture” has insurers insisting on ludicrous precautions to eliminate risk and imposing high premiums in their absence. Trying to avoid the “may contain nuts” and “this coffee may be hot” cases too-often repeated, the case of a fruit farm from thisisCornwall is illustrative. http://www.thisiscornwall.co.uk/news/article-1043587-detail/article.html

    I know teachers who tell me about the risk assessment forms that are needed if children leave school premises … even just when standing on the pavement outside school to draw a scene over the road.

    Eatlupins’ point about proportionality is key here and too many people think their roles is to eliminate ALL risk.

    As I tweeted earlier, this review won’t “change the world” but looks for a return to “common sense”. I look forward to reading the report when it comes out. Hope I’m not disappointed with the 19 recommendations (thinks “I will be”).

    PS. There are parallels between the “no win, no fee” cases and the situation with ACS Law who, using evidence from internet service providers, had compiled lists of people who had allegedly been guilty of illegal file sharing. http://www.dailymail.co.uk/news/article-1315790/Sky-internet-porn-details-leaked-Users-personal-information-appears-online.html?ito=feeds-newsxml

    Before the situation went disasterously wrong for the firm (when personal details of Sky Broadband and BT customers were leaked from their website) it seems they were writing to the individuals threatening legal action and demanding compensation on behalf of their corporate clients – even though in many cases weak evidence meant taking the matter to court would have been difficult.

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